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Adjustable Rate Mortgage Formula

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Adjustable Rate Mortgage refers to the interest rate that can change periodically over the life of the loan. Check FAQs

ADRM = \frac{(P \cdot R) \cdot {(1 + R)}^{np}}{{(1 + R)}^{np - 1}}

ADRM - Adjustable Rate Mortgage?P - Loan Amount?R - Rate of Interest per Annum?np - Number of Periods?

Adjustable Rate Mortgage Example

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Here is how the Adjustable Rate Mortgage equation looks like with Values.

Here is how the Adjustable Rate Mortgage equation looks like with Units.

Here is how the Adjustable Rate Mortgage equation looks like.

87360 = \frac{(100000 \cdot 0.56) \cdot {(1 + 0.56)}^{4}}{{(1 + 0.56)}^{4 - 1}}

87360 = \frac{(100000 \cdot 0.56) \cdot {(1 + 0.56)}^{4}}{{(1 + 0.56)}^{4 - 1}}

87360 = \frac{(100000 \cdot 0.56) \cdot {(1 + 0.56)}^{4}}{{(1 + 0.56)}^{4 - 1}}

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Adjustable Rate Mortgage Solution

Follow our step by step solution on how to calculate Adjustable Rate Mortgage?

FIRST Step Consider the formula

ADRM = \frac{(P \cdot R) \cdot {(1 + R)}^{np}}{{(1 + R)}^{np - 1}}

Next Step Substitute values of Variables

∴

ADRM = \frac{(100000 \cdot 0.56) \cdot {(1 + 0.56)}^{4}}{{(1 + 0.56)}^{4 - 1}}

Next Step Prepare to Evaluate

∴

ADRM = \frac{(100000 \cdot 0.56) \cdot {(1 + 0.56)}^{4}}{{(1 + 0.56)}^{4 - 1}}

LAST Step Evaluate

∴

ADRM = 87360

Adjustable Rate Mortgage Formula Elements

Variables

Adjustable Rate Mortgage

Adjustable Rate Mortgage refers to the interest rate that can change periodically over the life of the loan.

Symbol: ADRM

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Adjustable Rate Mortgage

Loan Amount

Loan Amount represents the portion of the financing that is provided through debt.

Symbol: P

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Loan Amount

Rate of Interest per Annum

Rate of Interest per Annum refers to the annualized interest rate charged on a loan or investment over one year.

Symbol: R

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Rate of Interest per Annum

Number of Periods

Number of Periods refers to the length of time over which one plans to save money for college expenses.

Symbol: np

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Number of Periods

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How to Evaluate Adjustable Rate Mortgage?

Adjustable Rate Mortgage evaluator uses Adjustable Rate Mortgage = ((Loan Amount*Rate of Interest per Annum)*(1+Rate of Interest per Annum)^(Number of Periods))/((1+Rate of Interest per Annum)^(Number of Periods-1)) to evaluate the Adjustable Rate Mortgage, Adjustable Rate Mortgage is the interest rate that adjusts based on a predetermined index or benchmark rate. Adjustable Rate Mortgage is denoted by ADRM symbol.

How to evaluate Adjustable Rate Mortgage using this online evaluator? To use this online evaluator for Adjustable Rate Mortgage, enter Loan Amount (P), Rate of Interest per Annum (R) & Number of Periods (np) and hit the calculate button.

FAQs on Adjustable Rate Mortgage

What is the formula to find Adjustable Rate Mortgage?

The formula of Adjustable Rate Mortgage is expressed as Adjustable Rate Mortgage = ((Loan Amount*Rate of Interest per Annum)*(1+Rate of Interest per Annum)^(Number of Periods))/((1+Rate of Interest per Annum)^(Number of Periods-1)). Here is an example- 87360 = ((100000*0.56)*(1+0.56)^(4))/((1+0.56)^(4-1)).

How to calculate Adjustable Rate Mortgage?

With Loan Amount (P), Rate of Interest per Annum (R) & Number of Periods (np) we can find Adjustable Rate Mortgage using the formula - Adjustable Rate Mortgage = ((Loan Amount*Rate of Interest per Annum)*(1+Rate of Interest per Annum)^(Number of Periods))/((1+Rate of Interest per Annum)^(Number of Periods-1)).

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Adjustable Rate Mortgage Formula

Adjustable Rate Mortgage Example

Adjustable Rate Mortgage Solution

Adjustable Rate Mortgage Formula Elements

Other formulas in Investment Banking category

How to Evaluate Adjustable Rate Mortgage?

FAQs on Adjustable Rate Mortgage

Variable Name